Montreal: All your game studios are belong to us

There’s an interesting article in today’s La Presse about how Ubisoft came to Montreal. I read it on the paper version and can’t find it online but to make a long story short some lobbyist from here decided Ubisoft would come to Montreal, promised stuff the government wasn’t aware of ($25,000 per employee per year) and it happened.

A few words about Quebec before going further

You need to understand who is writing this and where he’s living to maybe understand a bit better what will follow. Here in Quebec government is everywhere. For better or worst but let’s say that a lot of the good that could be done by such interventionism often miss the desired target. We have a lot of “free” services but that too often don’t discriminate anyone to first help those in need. Just a quick example is how a couple making $200,000 per year have as much chance as a single-mom working at minimum salary to get access to the $7 per day childcare service. It just depends if you were wise enough to be pregnant at the proper time of year. Apparently giving birth in summer is key …

When I hear folks talking in the US about how their president is a “socialist” my first thought is “I hope they never come here otherwise they’ll call us communists or something”. I’m guessing that a lot of liberals would like to live in a society such as ours (with probably good reasons) but from someone who lives there I think we’re doing a bit more than really required. Unfortunately when you try to question the current system you’re too often qualified as an agent of capitalism trying to destroy our social policies. Funny eh …

Would Montreal have a game industry without government money?

Well at least there wouldn’t be 7,966 persons working in this industry in Quebec. Ubisoft was the first one and it started with a 50% tax credit on salaries which has been lowered to 37.5% in 2003. Apparently there’s no end to this. You make video games? Well you’ll get this credit forever unless the government decides to stop this measure one day (which is not in any plans it seems).

More recently our very rich government started to give direct subventions for new studios to come here. $7.5 millions to Warner Brothers for 300 jobs, $3.1 millions to THQ for 400 jobs and $2 millions to Square Enix for 250 jobs.

Apparently that all of this is paying for itself in the end. I guess I can only believe people saying that as I have no clue. There’s still something that makes me feel uneasy about this. I’m all for helping business and trying to get big players to come here but when the whole thing turns into an automated machine (tax credit) I don’t like it. In my mind a government should help but not sustain an industry by itself otherwise you can’t help but wonder “is this industry really profitable or is someone laughing at us right now?”.

In my mind I just think that at some point you have to remove the training wheels. Maybe it’s simplistic way to see things but my uneasiness comes from there.

If you don’t do it others will

Yep I guess that’s what people from Vancouver would tell me at the moment … Game studios are business and their goal is to make money. If they can make more money someplace else why wouldn’t they move! Yep that’s a problem and if you do nothing about it then you won’t get your piece of the cake. That’s not about to change. Can we be smarter in how we give away money though? Are we being smart right now with the gifts we give to the game industry? Are we making sure they’ll remain around long enough for this to be profitable for us? Are we making sure they’ll pay us back if they move before fulfilling their promises? I’m a bit afraid to know the answers to these questions.

What’s our relation with the game industry? Are we begging them or do they really have an initial interest to come here? How far can we negotiate? Are we making sure we get the best possible deal of all of this.

The good side

Now the part I like. By creating economic opportunities to foreign game studios we also gave the opportunity to homegrown studios to become players that matter. A great example is Beenox. I’m delighted to see game studios from here expanding that much. I like seeing head offices actually based in Quebec. I guess it doesn’t guarantee anything but it makes me feel safer to give them money. There’s also some proud to see people from here build their own successful business instead of importing a division that don’t really make any calls.

So that brings me back to the whole “are we first targeting those who really need our help” thing. Quebec is not a huge place and all our nice social policies cost a lot of money and we’re highly taxed because of that (about 45% of your salary is gone before you cash it). In fact we so badly need money that we tax the federal tax itself (the QST is applied on the GST so while the QST is 9.5% it’s a bit higher in reality).

So are we first helping homegrown studios or are they on the same level as foreign studios we pay to come here. Do homegrown studios also receive direct subventions? Maybe I missed it but I never heard about that so far.

What would make me feel better is to learn someday that at least 25% (or let’s dream a bit… 50%!) of our game industry relies on homegrown studios instead of studios like Ubisoft, EA, etc. If we’re ready to give money to big studios to come here surely that we can make sure that in the long run we will be creating our own job. We helped to develop the industry so now it might be time to make sure that we make it our own. It doesn’t have to be just money and tax credits. Maybe we can make sure our education system helps to grow entrepreneurs specialized in this domain. Sure we’re already doing that in some form but if we have money to give away shouldn’t this be our priority?

In the end

It’s not about not giving money to the game industry. It’s not something particular to the game industry either. And it’s not close to an end. It’s about making sure we don’t get hostage from foreign studios. That we’re not just some workers in a factory that can move at any time.

I just want that the money we have we use in the best possible way to make sure we don’t get screwed like some are currently in other cities. It’s one thing to help to bring jobs here but a better approach is to make sure that in the end we create our own jobs. We can probably do both but when I read my newspaper I too often see about millions we give away to some foreign studios than successes about our own studios. I just wish we would make sure to shift the focus a bit.

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